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NIB Capital is preparing a $227.6m synthetic securitisation of shipping loans, a global first from a sector which is expected to see further activity. The deal transfers the mezzanine layer of a $669.5m portfolio of shipping loans. NIB transfers the credit risk of the portfolio to Merrill Lynch via a credit default swap, and retains a 6% first loss piece.

The latest securitisation of UK credit card receivables from MBNA Europe Bank met with strong demand from European investors, as spreads tighten across the market. Joint bookrunners Barclays Capital and JP Morgan brought the first CARDS transaction to be offered solely in euros.

KBC Alternative Investment Management has hired Dan Jones from KBC Financial Products to adapt one of JPMorgan's proprietary models, which focuses on hedging credit risk via equity, for KBC's systems. Andy Preston, fund manager, said the hedge fund team, which runs two funds with USD650 million in capital, has been studying using equity derivatives to hedge credit risk. He explained this is a natural progression from solely using credit-defaults swaps for convertible arbitrage, as convertibles stand naturally between the two asset classes of debt and equity. Preston said the most common form of this is to buy equity puts.

Small pieces of Adelphia Communications' Century Cable bank debt traded in the Street yesterday, starting the day at 88 and then falling to the 84 3/4 range, after Moody's Investors Service downgraded Adelphia and its operating companies. The ratings agency said the downgrades reflect the recovery values in the face of an "imminent bankruptcy." One dealer said that while market players expect a bankruptcy filing, the downgrades caused vehicles to sell, putting downward pressure on the price.

Roughly about $30 million of Tyco International's February 2003 paper was said to have traded in the 95 range before sinking to the 93-94 context on news of Dennis Kozlowski's, indictment for tax evasion. Market players had mixed feelings about the scandal. Some say it had nothing to do with the company and that it was purely a personal matter of the former ceo, and others are worrying that the creditability issues could extend to the company as well. Calls to Mark Swartz, company executive v.p. and cfo, were not returned.

Approximately $25-35 million of Tyco International February 2003 bank debt was auctioned in the 94-95 range on today, although some said the market for the name was more accurately represented at the 93-94 level. Market players said the name was moving because investors are anticipating troubled waters ahead and wanted to lower their exposure to the company's paper. The bank debt has fallen from the 94 1/2 to 96 1/2 level where traders had quoted it last week.

Apria Healthcare is reportedly looking for a 100 basis points cut on it's $175 million "B" loan after a government investigation into the company's Medicare billing practice led nowhere. "The hot market and shortage of paper is also allowing issuers to return to the market and get cheaper deals," said a banker. Bank of America is leading the BBB-/Ba1 deal and is looking to take pricing from LIBOR plus 3% through a 100% amendment. One banker familiar with the deal said, "the government cost the company a lot of money unnecessarily."

Bear Stearns has filled the "C" tranche created for Appleton Papers,with almost all the current investor group rolling into the deal. Closing will be on Thursday, said a banker, adding no new investors were invited into the deal. Some buysiders and bankers cited the deal as a challenge, pointing out the new $115 million "C" tranche is priced 1% below the existing "B," which offers a spread of LIBOR plus 4 1/4%. The original credit launched last year had to overcome concerns that Appleton operates in a sunset industry, at a time when the buyside was gun shy about committing to all but the defensive credits on offer (LMW, 8/10).

UBS Warburg and Deutsche Bank will launch a $165 million high-yield bond deal and syndicate a $30 million revolver to back the buyout of Dave & Buster's by senior management and Investcorp. The acquisition price is $255 million, including the assumption of Dave & Buster's debt, explained an Investcorp spokesman, who declined comment on the structure of the debt financing. A banker familiar with the deal said the company is more interested in long-term money than with using bank debt to fund the deal. Pricing has not yet been decided. "It is likely UBS and Deutsche Bank will look to bring in a couple of Investcorp relationship banks on the revolver," said the banker

Carl Icahn is in the market for XO Communications bank debt, making a direct appeal in a letter to investors in the credit and pushing levels up 6-7 points. Market players said Icahn has sent a letter to XO bank debt holders rather than work through Wall Street trading desks in search of a bank position. Approximately $25 million was believed to have changed hands as high as 52, although the amount that Icahn bought could not be determined. The debt had been trading in the 46-47 range. Icahn's office declined to provide a copy of the letter sent to investors.

ABN AMRO plans to merge its global cash and credit derivatives trading groups. The group will be headed by Niall Cameron, managing director and global head of credit trading and debt syndication in London. Cameron said he will finalize the rest of his team over the coming weeks.

AEP Energy Services, the European wholesale energy marketing and trading subsidiary of American Electric Power, has received internal approval to start trading weather derivatives in Europe and plans to pull the trigger on its first trades in the coming months. Thor Lien, managing director in Oslo, said AEP will concentrate on structured products, such as precipitation index swaps for hydroelectric power plants. He added the energy company will also structure products linked to temperature and, if there is demand, wind speed.